On March 14, Virginia Governor Glenn Youngkin vetoed House Bill (HB) 418 that would have created a vehicle for class actions in Virginia state courts and would have broadened statutory damages under the Virginia Consumer Protection Act (VCPA).

The bill could still become law if two thirds of both chambers vote to override Youngkin’s veto, but the bill originally passed the House with only 51 “Yes” votes to 49 “No,” and passed the Senate 21 to 18.

As discussed here, Virginia is currently one of only two states that does not allow class-action lawsuits in its courts. HB 418, originally introduced on January 10, 2024, sought to create a class-action framework loosely modeled on the Federal Rules of Civil Procedure. On February 9, HB 418 passed the House of Delegates and was sent to the Senate for consideration. Governor Younkin announced his veto of the bill on Thursday.

The bill outlined requirements for certification (numerosity, commonality, typicality, and adequacy) and delineated different types of classes, specifically authorizing those certified pursuant to the VCPA, limiting or precluding the need for implementing rules.

Youngkin said the law would have led to too many defendants settling cases brought under the VCPA. “The proposed changes have far-reaching implications by broadening the scope of statutory damages available under the Virginia Consumer Protection Act,” Youngkin wrote in his veto. “The possible statutory damages resulting from these consumer class actions will coerce defendants into settlements to avoid potentially ruinous financial consequences.”

Youngkin also said he was concerned about how the law would impact the Court of Appeals, which was recently expanded. “The recent expansion of the Court of Appeals within the Commonwealth’s legal apparatus must be considered when assessing this proposal,” he wrote. “This was the most significant modification to our legal system in decades, and consequently, the court continues to absorb the backlog of dockets, which must be resolved.”

Youngkin said the law would have led to an imbalance in the legal landscape. “Excessive tort liabilities and the threat of litigation expenses can force businesses to close their doors, imperiling economic growth,” he wrote. “Achieving a balanced legal system means addressing the concerns of both litigants and businesses in tandem. Only through a nuanced approach that acknowledges both excesses and deficiencies can Virginia’s economy continue to flourish.”

Currently, the only way Virginians can pursue a class-action lawsuit suit is if they have grounds to do so in federal court. However, federal courts across the country continue to divest themselves of cases, particularly those brought under the Fair Debt Collection Practices Act (FDCPA) and Fair Credit Reporting Act (FCRA), following the Supreme Court’s salient Article III standing decision in TransUnion LLC v. Ramirez.

HB 418 was entirely separate from Virginia’s Multiple Claimant Litigation Act, which, albeit seldom used, allows separate civil actions brought by six or more plaintiffs to be consolidated in certain circumstances.